House Prices and Macroprudential Policies: Evidence from City-Level Data in India

2020 ◽  
Author(s):  
Bhupal Singh
Keyword(s):  
House Prices ◽  
Macroprudential Policies ◽  
Level Data

scholarly journals House Prices and Macroprudential Policies

2020 ◽  
Vol 20 (291) ◽  
Author(s):  
Bhupal Singh
Keyword(s):  
Strong Influence ◽  
House Prices ◽  
Housing Prices ◽  
House Price ◽  
Housing Price ◽  
Macroprudential Policies ◽  
Regulatory Changes ◽  
Downward Pressure ◽  
Level Data ◽  
Housing Assets

This paper examines the efficacy of macroprudential policies in addressing housing prices in a developing country while underscoring the importance of fundamental factors. The estimated models using city-level data for India suggest a strong influence of fundamental factors in driving housing prices. There is compelling evidence of the effectiveness of macroprudential tools viz., Loan-to-value (LTV) ratio, risk weights, and provisioning requirements, in influencing housing price movements. A granular analysis suggests an even stronger impact on housing prices of a change in the regulatory LTV ratio for large-sized vis-à-vis small-sized mortgages, which buttresses their potency in fighting house price speculations. A tightening of the risk weights on the housing assets of banks causes significant downward pressure on house prices. Similarly, regulatory changes in standard asset provisioning on housing loans also influence house prices.

scholarly journals The Anatomy of the Transmission of Macroprudential Policies

2020 ◽  
Vol 20 (58) ◽  
Author(s):  
Viral Acharya ◽  
Katharina Bergant ◽  
Matteo Crosignani ◽  
Tim Eisert ◽  
Fergal McCann
Keyword(s):  
Portfolio Choice ◽  
House Prices ◽  
House Price ◽  
Residential Mortgage ◽  
Macroprudential Policies ◽  
Regulatory Constraints ◽  
Corporate Credit ◽  
Mortgage Credit ◽  
Level Data ◽  
Price Growth

We analyze how regulatory constraints on household leverage—in the form of loan-to-income and loan-to-value limits—a?ect residential mortgage credit and house prices as well as other asset classes not directly targeted by the limits. Supervisory loan level data suggest that mortgage credit is reallocated from low-to high-income borrowers and from urban to rural counties. This reallocation weakens the feedback loop between credit and house prices and slows down house price growth in “hot” housing markets. Consistent with constrained lenders adjusting their portfolio choice, more-a?ected banks drive this reallocation and substitute their risk-taking into holdings of securities and corporate credit.

Optimal Macroprudential Policies and House Prices in Korea

2017 ◽  
Vol 53 (11) ◽  
pp. 2419-2439 ◽  
Author(s):  
Yongseung Jung ◽  
Soyoung Kim ◽  
Doo Yong Yang
Keyword(s):  
House Prices ◽  
Macroprudential Policies

scholarly journals Negative equity in Ireland: estimates using loan-level data

2014 ◽  
Vol 7 (3) ◽  
pp. 327-344 ◽  
Author(s):  
David Duffy ◽  
Niall O’Hanlon
Keyword(s):  
Design Methodology ◽  
Time Series Data ◽  
House Prices ◽  
Age Groups ◽  
Series Data ◽  
Data Set ◽  
Content Type ◽  
Equity Analysis ◽  
Level Data ◽  
Younger Age

Purpose – This paper aims to, using a unique loan-level data set, show the extent to which negative equity in Ireland is concentrated in younger age groups. The sharp decline in house prices since 2007 has led to the emergence of widespread negative equity in Ireland. However, little is known about the type of borrower experiencing negative equity. Design/methodology/approach – This paper uses a unique data set that, for a large sample of mortgages, provides details on both the characteristics of the borrowers and their mortgages. Using this data set, the paper estimates the incidence of negative equity by analysing loans taken out to purchase a primary residence in the period 2005-2012. Findings – The analysis finds the situation in Ireland to be much more severe than that being experienced in other housing market downturns at present, with 64 per cent of borrowers in the period 2005-2012 experiencing negative equity. Analysis by age gives rise to concern, with the majority of those in negative equity aged under 40 years. The paper also points to the large wealth loss experienced by Irish households, in the order of 43 billion, as a result of the fall in property values. Originality/value – The paper is one of the first using loan-level time-series data in Ireland. It highlights the growth in negative equity during the crisis and the extent to which it is concentrated in the younger age groups. It also provides an estimate of the loss in wealth suffered by all households due to the fall in Irish house prices.

Depositor discipline, financial crisis and macroprudential policies

2020 ◽  
Vol 11 (8) ◽  
pp. 1531-1553
Author(s):  
Saibal Ghosh
Keyword(s):  
Financial Crisis ◽  
Global Financial Crisis ◽  
Dynamic Panel Data ◽  
Market Discipline ◽  
Content Type ◽  
Mena Countries ◽  
Macroprudential Policies ◽  
Level Data ◽  
Depositor Discipline ◽  
The Global Financial Crisis

Purpose Using bank-level data on MENA countries during 2000-2016, this study aims to examine the role and relevance of macroprudential policies in affecting depositor discipline. Design/methodology/approach The author uses the dynamic panel data methodology as compared to alternate techniques, owing to the ability of this technique to effectively address the endogeneity problem of some of the independent variables. Findings The findings suggest that market discipline for MENA banks occurs primarily through deposit rates. During the crisis, depositors typically focus on a catch-all measure of bank performance. Second, macroprudential policies play a role in influencing market discipline. Third, the behavior of depositors in exercising market discipline is more pronounced in countries with high Islamic banking share and works mainly through the price channel. Originality/value To the best of author’s knowledge, this is one of the early studies for MENA countries to examine this issue in a systematic manner. By focusing on an extended sample of MENA country banks covering an extensive period that subsumes the global financial crisis, author’s analysis is able to shed light on the relevance of macroprudential policies in affecting depositor discipline.

scholarly journals SPAIN AND THE CRISIS: HOUSING PRICES, CREDIT AND MACROPRUDENTIAL POLICIES

2017 ◽  
Vol 62 (01) ◽  
pp. 109-133 ◽  
Author(s):  
MARGARITA RUBIO ◽  
JOSÉ A. CARRASCO-GALLEGO
Keyword(s):  
Monetary Union ◽  
European Monetary Union ◽  
House Prices ◽  
Housing Prices ◽  
Housing Demand ◽  
Housing Sector ◽  
Spanish Economy ◽  
European Monetary ◽  
Macroprudential Policies ◽  
Credit Boom

In this paper, we propose a two-country, two sector monetary union DSGE model with housing. One of the countries is calibrated to represent the Spanish economy while the other one is the rest of the European monetary union. First, we illustrate how looser credit conditions coming from the Euro area, together with increases in housing demand, lead to an increase in house prices and credit in Spain. Then, we analyze to what extent, macroprudential policies could have avoided the excess in credit that triggered the financial crisis in Spain. We find that a countercyclical loan-to-value (LTV) rule that mainly responds to house prices would have mitigated the credit boom in Spain. These results can also be applied to other countries facing similar problems in the housing sector and thinking about implementing macroprudential policies.

scholarly journals Rise in house prices and industrial growth: evidence from city-level data of China

2020 ◽  
pp. 1-19
Author(s):  
Xiaoyong Huang ◽  
Guorong Li ◽  
Jiayu Zhang ◽  
Liheng Li ◽  
Xiangyun Xu
Keyword(s):  
House Prices ◽  
Industrial Growth ◽  
Level Data
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